Egypt Expands EGP 50 Billion Initiative for Hotel Construction and Tourism Growth
EGYPT ENHANCES EGP 50 BILLION INITIATIVE TO BOOST TOURISM AND HOTEL CONSTRUCTION. NEW TERMS INCLUDE REDUCED INTEREST RATES AND EXPANDED PROJECT ELIGIBILITY.
The Egyptian government has enhanced its ambitious EGP 50 billion initiative to boost tourism and hotel investments, introducing significant updates to attract more investors. The revised program now offers reduced interest rates and expanded eligibility for hotel projects, including new constructions and conversions of closed buildings. This strategic move aligns with Egypt’s goal to attract 30 million tourists and create 45,000 new jobs, marking a notable progression from the initial plan.
During a recent meeting, key details were reviewed. The Ministries of Finance, Tourism and Antiquities, and Investment and International Cooperation agreed on the terms. The credit available for each company depends on business size and banking regulations. Companies can receive up to EGP 1bn, or EGP 2bn for a client and its related parties, with a maximum of two banks involved.
The EGP 50 billion initiative allocates up to EGP 50bn for tourism companies, pending approval from the Ministry of Tourism and Antiquities. This funding is for building and operating new hotel rooms, expanding existing projects, or converting closed buildings into hotels. Projects must include construction, fittings, and finishes, and the building must not have a prior hotel operation license.
EGP 50 billion initiative: Priority Areas and Application Process
Priority funding will go to key areas like Luxor, Aswan, Greater Cairo, the Red Sea, South Sinai, Sharm El-Sheikh, Taba, Nuweiba, and Dahab. Applications will open for one month and stay open for 12 months. The maximum drawdown period is 16 months from the first withdrawal, with a final deadline of June 30, 2026. Companies will get a 6-month grace period after the drawdown to obtain a final or temporary operation license, ensuring swift service commencement.
Benefiting companies will enjoy a reduced interest rate of 12% on a declining basis with this EGP 50 billion initiative. The Ministry of Finance will cover the interest rate differential, calculated as the Central Bank’s credit and discount rate plus 1% minus 12% on a declining basis. However, this compensation excludes other fees or commissions.
Economic Impact and Employment Opportunities
Investing in new hotel rooms will boost the national economy. Around 15,000 new hotel rooms can generate annual revenues of $1bn to $2bn, plus EGP 1.5bn to 2bn in value-added tax. These figures exclude other taxes like commercial, industrial profits, and payroll taxes. Additionally, operating these rooms is expected to create about 45,000 new direct and indirect jobs.
Encouraging hotel room construction will reduce unemployment through increased private-sector investment. The EGP 50 billion initiative aligns with the Ministry of Tourism and Antiquities’ strategy to attract 30 million tourists, needing 240,000 to 250,000 new hotel rooms. Collaboration among state entities is crucial to achieving this goal.
